Continuing efforts to consolidate the ownership of its majority-controlled e-commerce properties, Barry Diller’s USA Interactive is acquiring the outstanding stock of Internet travel play Hotels.com
in a $1.1 billion deal.
The move completes the restructuring by USA Interactive
, which only last month acquired the remaining shares of its Expedia
online travel agency.
The Hotels.com deal is a tax-free stock-for-stock transaction, said USA, already the majority owner (68 percent of the stock and 97 percent of the voting stock) of the hotel booking site. USA began a year ago to simplify its corporate structure by buying in its publicly traded subsidiaries.
In its announcement on the deal, USA said that it intends for both Hotels.com and Expedia to continue to be operated separately. But the company left itself an out if things change, saying that “travel is, however, its own sector and USA would continue to review strategy and over time may decide to make changes.”
USA’s original buyout bid was part of a massive plan to shore up USA’s ownership in three of its fast-growing travel and entertainment subsidiaries and create an end-to-end e-commerce powerhouse. That bid included offers for Ticketmaster, Hotels.com and Expedia. The Ticketmaster deal was consumated last October.
Hotels.com shareholders will receive 2.4 shares of USA common stock for each share of Hotels.com stock that they own, valuing their stock at about $60.24. USA closed at $25.10.
“We believe that the merger is in the best interests of Hotels.com’s minority shareholders,” said Elan Blutinger, chairman of a special committee of Hotels.com’s directors. An earlier effort by USA Interactive (formerly USA Networks) to complete the buy-up was rebuffed by investors.
David Litman, Hotels.com chairman and CEO, and Bob Diener, president, will continue in their current positions,
As airline travel has slumped in the United States, hotel room booking has become one of the shining stars in the online travel sector. Hotels are a key component of Expedia’s travel packages business, for instance. Other travel sites also have been busy making hotel deals and jockeying for position in this space.